Nintendo: No Wii U price cut in the works

Declining sales projections don't mean cheaper hardware anytime soon.

Since Nintendo announced yesterday that it is cutting back Wii U sales projections, some consumers began to wonder if the system, which currently starts at $300, would see a price cut sooner rather than later. Nintendo President Satoru Iwata threw cold water on those hopes today, telling investors that such a price cut would not be forthcoming.

"With Wii U, we have taken a rather resolute stance in pricing it below its manufacturing cost, so we are not planning to perform a markdown," Iwata said in translated remarks. "I would like to make this point absolutely clear. We are putting our lessons from Nintendo 3DS to good use, as I have already publicly stated. However, given that it has now become clear that we have not yet fully communicated the value of our product, we will try to do so before the software lineup is enhanced and at the same time work to enrich the software lineup which could make consumers understand the appeal of Wii U." (Links added for context.)

Translated from corporate speak, the message is clear: "The Wii U isn't too expensive, we just haven't done a good job convincing enough people why it's worth the price."

Sales data provided by Nintendo shows that after peaking at launch, Wii U sales have fallen precipitously worldwide. The system is already selling similarly to the years-old PS3 in the Japanese market, and it is well below its older competition in the US and Europe (the latter of which "lost momentum fastest"). Iwata admitted Nintendo was "unable to incite enough excitement in society," causing the Wii U to "[fail] to maintain its momentum after the turn of the year." Iwata also blamed recent software delays for the lack of sales momentum in 2013.

While Iwata admitted that the Wii U is not as instantly understandable as the Wii and its motion-sensitive remote, he expressed hope that "its value by nature is something that takes time to appreciate and hence cannot be spread amongst society instantly." He also said the company is "confident that [the Wii U] will have high sales potential once [it is] familiar to more consumers.... People always try to compare the sales of Wii U with that of Wii, but the current situation is requiring us to focus upon how to re-energize Wii U sales irrespective of any comparisons with the previous platforms."

The situation is somewhat better for the Nintendo 3DS, which is a dominant market leader in Japan, but Iwata said sales for the system are below targets in the US and Europe. "In the [US and European] markets, Nintendo 3DS has not yet solved its chicken-and-egg problem as a platform," he said. "To put it another way, we do not yet have a virtuous cycle where hardware sales and software sales drive one another. Because of this, our lineup lacks diversity, and as a result, Nintendo 3DS does not have as wide and diverse an appeal as Nintendo DS."

Iwata also revealed that 74 percent of Wii U owners have connected the system to Nintendo's online network, a massive increase from previous Nintendo hardware. Nintendo will soon be reaching out to developers to make apps and games that work on the Wii U through open standards like HTML5, Javascript, and Unity, Iwata added.

Kyle Orland / Kyle is the Senior Gaming Editor at Ars Technica, specializing in video game hardware and software. He has journalism and computer science degrees from University of Maryland. He is based in the Washington, DC area.